Lebanon raises the price of bread for the fifth time in a year | Business and Economy News

For the fifth time this year, Lebanon has raised the price of subsidized bread as the country’s political, financial and economic crisis worsens with no resolution in sight.

The Lebanese Ministry of Economy and Trade has raised the price of subsidized bread for the fifth time in a year as the country’s multiple crises worsen with no resolution in sight.

The ministry said on Tuesday that the reason for the latest increase – 18% from the last increase in February – was the end of central bank subsidies on sugar, which in turn increases the cost of bread production.

Lebanon is grappling with the worst economic and financial crisis in its modern history – a crisis which the World Bank says should be classified as one of the worst the world has seen for the past 150 years. The Lebanese pound has lost 90% of its value since the unrest sweeping the country in 2019. Earlier this month, the pound broke a record low of 15,500 Lebanese pounds per dollar on the black market. The official exchange rate remains 1,507 pounds to the dollar.

The World Bank said in a report this month that Lebanon’s gross domestic product (GDP) is expected to contract 9.5 percent in 2021 after declining 20.3 percent in 2020 and 6.7 percent in last year.

The central bank has cut funding for imports in subsidized dollars, as foreign exchange reserves have fallen dangerously from $ 30 billion at the start of the crisis in late 2019 to nearly $ 15 billion today. This prompted traders to raise prices or stop imports.

Most Lebanese have seen their purchasing power decimated and their savings evaporated, and more than half of the population of this small country now lives below the poverty line.

In June of last year, the government increased the price of flatbread, a staple in Lebanon, by more than 30%, for the first time in 10 years. It has since raised the price three times before Tuesday.

The Ministry of the Economy indicates that 910 g (2 pounds) of bread will be sold for 3,250 pounds (more than $ 2 at the official price). It was sold for 2,750 pounds before the last increase.

Lebanon is experiencing severe shortages of gasoline, medicine – both still subsidized by the state – and other vital commodities. Power cuts last much of the day, and people queue for hours to refuel their cars. Shootings and fights broke out at gas stations, leaving several injured.

One of the reasons for the fuel shortage is smuggling to neighboring Syria, which has its own fuel shortage but is priced almost five times that of Lebanon.

A representative of the fuel distributors, Fadi Abu Shakra, said 140 gas station owners refused to receive gasoline on Tuesday due to the problems they face, including threats, blackmail and beatings.

“They cannot protect themselves,” he said, calling on the security forces to protect gas stations, according to the national news agency.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *